Key economic issues for ANC policy forum

SOUTH Africa’s plans on everything from nuclear power to how to spark growth in an anaemic economy will fall under the spotlight at an ANC policy conference starting today.

The ANC won 62 percent of the vote last year. While the election of the party’s leadership isn’t up for debate – that will only happen at its next national conference in 2017 – delegates may agree to allow officials to openly campaign for posts, lobbying the party discourages.

Debate at the conference, which takes place in Midrand near Johannesburg mid-way through the party’s five-year electoral term, will focus on 213 pages of discussion documents drafted by ANC officials. Here are the key economic issues on the table:

Bolstering growth

While the government is targeting 5 percent growth by 2019, the economy contracted an annualised 1.3 percent in the second quarter, as energy shortages constrained output. The ANC’s proposals to improve the economy’s competitiveness and encourage local manufacturing include containing power-price increases, reducing port and freight subsidies for commodity exporters, improving telecoms infrastructure, expanding the tourism industry and reducing the volatility of the rand.

A decade of under-investment in new power plants has led to managed blackouts and has deterred investment.

The ANC wants South Africa to consider increasing its use of gas and hydropower, which if necessary should be imported from the region. The party is wary that the state’s plans to build new nuclear plants that will generate 9 600 megawatts of power may be unaffordable, and says any investment must be preceded by “a full, transparent and thorough cost-benefit analysis”.

More from mining

The ANC is intent on ensuring the country derives greater benefit from its mineral resources. Its proposals include implementing a resource-rent tax and mineralexport taxes to encourage local processing. It also wants to explore establishing a local metals exchange that would make pricesetting more effective and assist in tax collection. The ANC backs the government’s plans to draft standalone laws to regulate the oil and gas sector to encourage development of the fledgling industry and ensure the state secures a free stake in all new projects.

The ANC says the white minority still wields disproportionate control over the economy. The party’s proposals include securing state support for black industrialists and entrepreneurs, encouraging businesses to give stakes in companies to workers and encouraging state entities to buy more from blackowned businesses. – Bloomberg